TTD - unfair hit thanks to FB today

Looks like TTD getting taken out to woodshed thanks to data privacy issues of FB, which TTD has nothing to do with. Here is their take on it:

From TMF’s interview in Dec:…

Gardner: I’d love to hear your take on privacy as it relates to your business, and maybe with a little bit more specificity on your view on the Intelligent Tracking Prevention from Apple, and the risks that poses to you and the workarounds that have been created. So broader umbrella is privacy, and then within that, the impact of Apple’s Intelligent Tracking Prevention.

Green: Sure. So you know, we have worked really hard to lead the way in respecting consumers’ privacy. So in the broadest of strokes, I think every internet consumer understands to some extent, although perhaps not the full extent, that as we share data, which sometimes is our email address or things that we’re interested in, or our photos or whatever, on Facebook or whatever, that as you exchange some amount of data or insight, in exchange for that you get all these free services that are effectively the internet. And that data, and then receiving and viewing ads, is what powers the internet. And the data is what makes the ads more relevant and creates a better ad experience for everybody.

But in order to make that as healthy as possible, we of course have to make certain that we respect consumers’ privacy. And make sure that we never do anything that loses trust with the consumer. So what we specifically do, is just make certain that we’re focused on anonymized data, so it’s not tied to an individual. We don’t keep track of anybody’s email addresses, or anybody’s name, or anything like that. And that the insights that we use don’t have anything to do with really sensitive areas like aspects of their personal health or things like that.

So by doing that, and just focusing on things like, you know, their travel interests or the categories of advertising that would be relevant to them, instead of doing anything that’s creepy or wrong, we’re instead just helping create a better internet and a more relevant experience.


Interestingly enough, I was just trying to read through TTD’s 10k last night. Plenty of discussion in there too about privacy.

Here’s a link to the 10k as a .pdf.…

Have looked at some possible TTD call options strikes as well, as this seems to be a transient sale price.

Also, I think this link might be better than the link.…

I have a simple rule to deal with TTD, never by a stock that is cheap by conventional metrics. Never do it, unless there is some sort of real and substantive and material FUD (fear, uncertainty, doubt). All you end up doing otherwise is debating and speculating why it is so “cheap”. There always is a reason. If you can find the FUD, more power to you. If not, then just stay away.

Of course “cheap” I am talking about here is traditionally cheap by some textbook. And that is what TTD is now. Find the FUD or stay away.

Is the Facebook issue actually the real FUD that has kept TTD from being properly overvalued as almost all great companies and stocks are?



I am out of energy repeating stuff, so this will be a short response:

They went from IPO of approx $20 to $66 (the high Nov 2017) in 13 months. A huge short interest built up in late Oct and Nov:

The backdrop there is that other ad-tech companies crashed and burned in the recent past, and then Criteo took a hit due to Apple IOS issue. None of this matters with TTD business model, but it is like when all biotechs go down on same day…just get lumped together.

The normal volume is fairly low and a large portion of shares are held by institutions. Stock plummets from $66 to about $50 then trades sideways until Feb 9th and hits $40-42 in intraday. Shorts are having a field day. But they didn’t cover…greed perhaps. Feb 22nd ER hits and stock skyrockets, but never gets higher than $60. So if you originally shorted the stock near the peak, you lost paper profits but you are still slightly positive. And per the numbers at link above, short interest did go down slightly, but it is still high. We hit the Trump/tariff cycle and stock gets whacked down to low 50s with everyone else. Those that bought in the $40s after ER on Feb 22nd are seeing their paper profits evaporate a bit, so they panic sell. Price hits $47 today and volume spikes as some big player decided to take advantage of the firesale. Stock back to $50 already.

Depending on how you look at it:
Stock is up from $18-20 IPO to $50 in 2 years.
Stock is down 25% from 52 wk high.
Stock is up 20-25% from Feb low.

I think I will just ride this out the rest of the year and see if they keep crushing it during the ER conf calls. If something changes and China flattens or regresses growth, or they somehow have their own data scandal, or Jeff Green does something publicly inappropriate/stupid, or something else I can’t predict but don’t expect that materially impacts the business, I expect about $65-70 by end of 2018. If we get a recession, then all bets are off, but same could be said for a lot of companies at that point. If economy is healthy, and we aren’t at war with China, I expect stock to do well.

Their Focus (hey…I remembered how to do bold - probably been 10 years)…
First, we will focus on growing spend across all channels. Being omnichannel is the only way to win but we believe, ultimately everything is a dress rehearsal for the migration from Traditional TV to Connected TV and online video. In a minute, I want to discuss our significant progress on this front during Q4 2017.

Second, to service the biggest brands we must be global, which requires our expansion into China. Third, as an independent player - meaning we don’t own media, we can lead an industry-wide identity footprint, which is necessary to be the best at our fifth initiative.

Our fourth strategic initiative is to increase our data offering and our fifth initiative is to build the tools to revolutionize media, planning and buying. I’ll elaborate a bit on our progress on all five of these initiatives.

People Keep thinking FB/Google will kill them…
Shields: What about the perception that Google and Facebook are fueling this consolidation by running away with the market?

Green: That connection that should not be made. It’s funny, I don’t think I’ve ever taken a meeting with Wall Street without that question being asked. Google is one of the greatest inventions in my lifetime. But, if you think about it, 70% of their P&L is about making money from I consider them a new media company. Similarly, all Facebook does is monetize Facebook. They are a destination…Investors in, in particular, give Google and Facebook way way too much credit for being the answer to all advertising’s problems.

Yes, a bunch of logos on the Lumascape are gonna fall off or just go away, but when you measure the size of the opportunity in programmatic, we’re still in first inning. People lose sight of how much transformation is coming to advertising.

Why China is a big deal for them…
And I think something that people don’t often understand is, neither Chinese businesses nor the Chinese government want to see companies take money out of China when there’s a totally viable alternative inside of China. And so the thing that is really different about our business is that, you’ll recall, we’re the ones writing checks to the big publishers. So we go to the Chinese market with sort of step one being to create great relationships with companies like Baidu and Alibaba and Tencent. And to create relationships with the big media companies.

And you know, we talk about the U.S. being competitive, without a doubt the Chinese media market is as competitive if not more competitive. In fact, I would argue it’s more competitive. And it’s also the only scaled media market in the world that is more fragmented than the United States.

So when we go in with a pitch that is essentially, we’re not trying to take money out of China – in fact, the opposite. We’re trying to bring advertising spend from big multinational brands, like KFC, or Mercedes, or Pepsi, or Coke, to take these big brands and help them spend money on these big publishers in China. It’s much, much easier to partner then, because we’re bringing money to China instead of the other way around. And we’re not trying to win consumers’ hearts and minds to our brand. We’re instead just trying to help these other big multinational brands service that market more effectively.

And one of the things to just be really macro, because I know, as you mentioned, your investors think very long term, between here and 2030, basically, we’re going to take 12% of the world’s middle class, and I’m doing these numbers from heart, but in our investor day presentations these are all there, and there’s estimates that say instead of 12% of the population in China being middle class a few years ago, it will by 2030 be, I think it was almost 80%, which is just the most amazing growth of middle class arguably in the history of capitalism.

And what we’re doing in that process is, when people are choosing a refrigerator brand, or a car brand for the very first time in their lives as they join the middle class, we’re able to influence that for the biggest multinational brands in the world. And fuel the rise of the middle class. And so we think, as the economic engine for media, we’re playing a role in helping that middle class grow. And so we think we’re a significant contributor in China instead of one of those companies that often fails to do well in China, because they go in trying to extract resources instead of bringing them.